31 Oct

Muirhead Avenue, Tuebrook, Liverpool, L13 – 8.35% Gross Yield

33-muirhead-avenue-front-1 36a-muirhead-avenue-front-8I’ve been asked my one of my good longstanding landlords to sell his two apartments that my team have managed for over 7 years.

The landlord in question is now looking to retire and has been advised by his financial planner that he should sell the properties. The problem he faces is that he has two excellent mature longstanding tenants who call his properties, their home and he does not want them being disturbed or evicted. He has requested that I offer this property to my blog readers and also to my investors/landlords who would purchase the property with the tenants in situe and remain to leave the tenants with quiet enjoyment in the properties.

One property is a three bedroom apartment that has been occupied by the current tenant since December 2010 and he is currently paying a rent of £5,760 per annum. As the property is a leasehold, then it has 101 years remaining on the lease and the service charge (including the insurance) is £616.44 per annum.

The second property is a two bedroom apartment that has been occupied by the current tenant since August 2007 and she is currently paying a rent of £5,100 per annum. As this is also a leasehold, then it has 88 years remaining on the lease and the service charge (including the insurance) is £521.76 per annum.

The landlord has requested that I offer the properties below market value so that we can secure the right purchaser who will look after his tenants. The properties are to be sold for £130,000 for both of them and with both properties generating an annual rental income of £10,860, then this investment offers a gross yield of 8.35%. Once the service charge has been deducted, then this reduces the yield to 7.5%, which I feel is fantastic yield for a hands off investment.

This investment is suitable for first time investors or well experienced landlords as it is returning a high yield with two longstanding tenants who should remain in the property for many many years to come.

Click here to view a list of current two bedroom apartments available for sale. There are currently no 3 bedroom apartments available but click here to view a list of sold prices for properties on this road for both 2 and 3 bedroom apartments.

All the buildings on this road all benefited from new UPVC windows, new roofs, front and rear gardens where landscaped and are looked after on a regular basis. The communal areas have also received investment and have been fully refurbished.

If you want further information about the properties and the tenants, then contact me on 0151 231 1613 (option 1) or adamr@liverpoolpropertyblog.com

27 Oct

8.8% of Liverpool People live in Shared Households

8-8-of-liverpool-people-live-in-shared-households

 

 

 

 

 

 

 

 

 

 

I had an interesting chat the other day with a Liverpool landlord. He said he had been chatting with an architect friend of his who said back in the mid 2000’s, the developments he was asked to draw were a balance of one and two bed properties, compared to today where the majority of the buildings he is designing are more towards two and sometimes three bedrooms. Now of course, this was all anecdotal but it made me think if similar things were happening in the Liverpool property market?

This is a really important point as I explained to this landlord, as knowing when and where the demand of tenants is going to come from in the coming decade is just as important as knowing the supply side of the buy to let equation, in relation to the number of properties built in Liverpool, Liverpool property prices, Liverpool yields and Liverpool rents.

In 2001, there were 187,900 households with a population of 439,500 in the Liverpool City Council area. By 2011, that had grown to 206,500 households and a population of 466,400.

.. meaning, between 2001 and 2011, whilst the number of households in the Liverpool City Council area grew by 9.93%, the population grew by 6.13%

Nothing surprising there then. But, as my readers will know, there is always a but! My analysis of the 2011 Census results, using the most recent in-depth data on household formation (eg ‘one person households’, ‘couples/ family households’ or ‘couple + other adults households and multi -adult households’), has displayed a sudden and unexpected break with the trends of the whole of the 20th Century. There has been a seismic change in household formation in Liverpool between 2001 and 2011.

Between 2001 and 2011, the population of Liverpool grew, as did the number of Liverpool properties (because of new home building). However, the growth rate of new properties built in Liverpool was much lower than expected though, but still the population has grown by what was expected, meaning the average household size was larger than anticipated in Liverpool. In fact, average household size (ie the number of people in each property) in 2011 was almost exactly the same as in 2001, the first time for at least 100 years it had not fallen between censuses. (Since 1911, household size has decreased by around 20% every decade).

Looking at figures specifically for Liverpool itself,

  • One person households – 37.9%
  • Couples/family households – 53.3%
  • Couple + other adults/multi-adult households – 8.8%

8-8-of-liverpool-people-live-in-shared-households-graph

This decline was reflected in large scale shifts in the mix of household types. In particular, there were far more “couple + other adults households and multi -adult households” than expected (8.8% is quite a lot of households). It can be put down to two things; increased international migration and changes to household formation. A particularly important reason for the difference can probably be attributed to the evidence that migrants initially form fewer households (ie two couples share one property) than those who have lived in the UK all their lives. Also, changes to household formation patterns amongst the rest of the population, including adult children living longer with their parents and more young adults living in shared accommodation (as can be seen in the growth of HMO properties (Homes of Multiple Occupation).

So, what does all this mean for Liverpool Homeowners and Landlords? Quite a lot in fact. There has been a subtle shift to slightly larger households in the last decade, meaning smart landlords might be tempted to buy slightly larger properties to rent out – again good news for homeowners who will get top dollar for their home as they sell on. But now with Brexit, household formation might swing the other way in the next decade? Who knows? Watch this space!

If you want to find out more about the Liverpool Property Market, visit the Liverpool Property Blog www.liverpoolpropertyblog.com or drop me an email to adamr@liverpoolpropertyblog.com

24 Oct

The Reach, Leeds Street, Liverpool – Great Price – 6.8% Gross Yield (can be higher)

the-reach-a the-reach-b the-reach-c the-reachI’ve spotted a two bedroom 4th floor apartment on The Reach which is currently available for only £110,000.

The property currently has a tenant living in it and they are paying an annual rental income of £7,500 which I believe to be too low for this development. As the property comes with parking, then I feel you should be achieving closer to the £8,100 per annum. I’ve not been in this apartment but looking at the photos online, it looks like it has great layout and good views of the City. The Reach development offers a concierge as well as spacious apartments and they always prove very popular with tenants looking to live in the City Centre.

Two bedroom apartments originally sold for between £140,000 and £180,000 and although there have been a few properties sold below £110,000, then I feel purchasing this property with a great view and parking would be an excellent purchase.

Click Here to view previous sold prices in the development

The property is currently up with two agents so this may be a repossession but I would still advise trying to put a offer in below asking price to see if the vendor is willing to accept it.

Click Here to view the property

If you are interested in the property, then I have a good relationship with these agents and I can assist with the purchase of this property. Contact me on adamr@liverpoolpropertyblog.com if you need my help

20 Oct

House Prices in Liverpool rise by more than 8% in the last 18 months

house-prices-in-liverpool-rise-by-more-than-8-in-the-last-18-months
Over the last month, the Liverpool property market has seen some interesting movement in house prices, as property values in the Liverpool City Council area rose by 0.7% in the last month, to leave annual price growth at 4.8%. These don’t compare as well to the national figures, where property prices across the UK saw a monthly uplift of 0.42%, leaving the annual property values across the country 8.3% higher. This might be down to the constraining factors of Stamp Duty changes in the spring and more recently our friend Brexit, however, it does mean there might be some bargains out there for landlords and homebuyers alike.

Looking at the figures for the last 18 months makes even more fascinating reading, whereby house prices are 8.7% higher, again thought provoking when compared to the national average figure of 13.6% higher.

However, it gets more remarkable when we look at how the different sectors of the Liverpool market are performing. Over the last 18 months, in the Liverpool City Council area, the best performing type of property was the detached, which outperformed the area average by 1.4% whilst the worst performing type was the apartment, which under-performed the area average by 0.8%.

Now the difference doesn’t sound that much, but remember two things, this is only over eighteen months and the gap of 2.2% (the difference between the detached at +0.4% and apartments at -0.8%) converts into a few thousand pounds disparity, when you consider the average price paid for a detached property in Liverpool itself over the last 12 months was £281,100 and the average price paid for a Liverpool apartment was £119,400 over the same time frame.

I know all the Liverpool landlords and homeowners will want to know how each of the property types have performed, so this is what has happened to property prices over the last 18 months in the area…

  • Overall Average           +8.7%
  • Detached                     +10.2%
  • Semi Detached          +9.8%
  • Terraced                      +8.1%
  • Apartments                 +7.9%

house-prices-in-liverpool-rise-by-more-than-8-in-the-last-18-months-graph

So what does all this mean to Liverpool homeowners and Liverpool landlords and what does the future hold?

When I looked at the month-by-month figures for the area, you can quite clearly see there is a slight tempering of the Liverpool property market over these last few months. I have mentioned in previous articles that the number of properties on the market in Liverpool has increased this summer, something that hasn’t happened since 2008. Greater choice for buyers means, using simple supply and demand economics, that top prices won’t be achieved on every Liverpool property. You see, some of that growth in Liverpool property values throughout early 2016 may have come about because of a surge in house purchase activity, an indirect result of the increase in stamp duty on second homes from April, thus providing a temporary boost to prices.

However, it may be possible the recent pattern of robust employment growth, growing real earnings and low borrowing costs will tilt the demand/supply seesaw in favour of sellers and exert upward pressure on prices once again in the quarters ahead.

…And Liverpool property values, assuming that everything goes well with Brexit, I believe in twelve months’ time we should see values in the order of 2% to 3% higher.